Last month, the Reserve Bank of Australia (RBA) cut interest rates for the first time in years.
If economists are to be believed, this could be the first of a series of cuts over the course of the year.
While this is great news for borrowers, it will be a blow to savers and income investors who are going to have to adjust to life with skinny interest rates again.
But don't worry because there are quality ASX dividend stocks out there that are being tipped to offer attractive dividend yields. Here's what analysts are saying about two:
Harvey Norman Holdings Limited (ASX: HVN)
Analysts at Bell Potter think that Harvey Norman could be an ASX dividend stock to buy instead of term deposits.
Harvey Norman is one of Australia's largest retailers with a network of company-owned and franchised stores across the country and overseas. It sells household goods, electronics, and furniture.
Bell Potter thinks that its shares are attractively priced at current levels. Particularly given a potential AI upgrade/replacement cycle. It explains:
We see HVN trading attractively at ~15x on a 1-year forward basis with multiple catalysts near/midterm such as improving sales trends in key markets assisted by a sizable upside from the AI driven upgrade cycle/replacement & spend shift to tech, gaining penetration in targeted regions in the UK in addition to the incremental earnings opportunities in its Property division as Australia's largest single owner with a $4.4b global portfolio.
The broker believes this will support the payment of fully franked dividends of 25.4 cents per share in FY 2025 and then 28.1 cents per share in FY 2026. Based on the current Harvey Norman share price of $5.01, this will mean dividend yields of 5.1% and 5.6%, respectively.
Bell Potter has a buy rating and $6.00 price target on its shares.
GQG Partners Inc (ASX: GQG)
Another ASX dividend stock to consider as an alternative to term deposits is GQG Partners.
It is a global investment company with a focus on managing active equity portfolios. It manages funds on behalf of investors such as large pension funds, sovereign funds, wealth management firms, and financial institutions.
Goldman Sachs is feeling positive about the company's outlook and expects some very big dividend yields in the coming years. It recently said:
We are Buy rated on GQG because: 1) Net flow trajectory has been very strong but has slowed 2) Strong performance has resulted in performance fees becoming increasingly more material 3) Medium and long term relative performance strong 4) Attractive valuation vs. peers in context of very strong earnings growth. 5) Impacts from Adani entity investments appear manageable.
Goldman is forecasting dividends per share of 15 US cents (23.9 Australian cents) in FY 2025 and then 17 US cents (27 Australian cents) in FY 2026. Based on its current share price of $2.13, this would mean large dividend yields of 11.2% and 12.7%, respectively.
Goldman Sachs currently has a buy rating and $3.20 price target on its shares.
